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SHINING ARMOR The COVID-19 pandemic has shone a bright spotlight to the field of humanitarian logistics and the wider global & local economies, and the supply chain associated with it. The outbreak has majorly impacted global manufacturing capacities and distribution of products & services locally and across borders. The response to the pandemic has been varied with some organizations having been able to quickly adapt and adjust to the new reality, while some have found it hard to survive. The dominant focus on minimizing costs, while following lean, just-in-time, and zeroinventory approaches while being hugely effective in normal times have several deficiencies in operating during a disaster or pandemic setting. Much can thus be learned from humanitarian supply chains for managing pandemic or disaster related supply chain disruptions, shares Sunil Banthiya, Chief Operating Officer, Aliaxis India, during the recently held Tattv’21 conclave by SIOM, Nashik.
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HE World Economic Forum estimates that in the decades to come, epidemics will, on an average, cause an annual economic loss of ~ 0.7% of the global GDP, equal in scale to the global economic loss caused by climate change (WEF, 2019). The current coronavirus disease (COVID‐19) pandemic constitutes a global healthcare crisis with far‐reaching consequences on livelihoods and economies. The pandemic has had direct and indirect impacts and cascades on the supply chain. Going by such striking estimates, this could not have been a more opportune time to talk about the importance of humanitarian logistics. What exactly is humanitarian logistics? The basic task of humanitarian logistics comprises planning, acquiring, and delivering requested supplies and services, at the places and times they are needed for the purpose of alleviating the suffering of vulnerable people. Humanitarian supply chains focus on saving lives and on
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responding to disasters and emergencies and are therefore geared toward dealing with turbulence, uncertainties, and a complex dynamic environment. The key difference between humanitarian logistics versus any business supply chain is in their strategic objectives. A business supply chain is centered around the fact that you want to achieve the most optimal cost to serve along with great customer satisfaction. The objective of humanitarian logistics is to deliver a certain throughput in a race against time in most situations. The emphasis is more on throughput and not so much on optimizing the cost of service.
COMPLEXITY OF MANAGING SUPPLY CHAIN DURING A PANDEMIC Let me share some of the challenges that we faced in managing our supply chain during this COVID-19 pandemic. A) Volatile Demand: The most talkedabout example of demand spike,
toilet paper, is ironically usually the go-to example of a perfectly forecastable product, since the end consumption, as you would imagine, is rather stable. The one thing which one quickly realized was that in this pandemic situation, no historical based statistical algorithms, the mainstay of most demand forecasting tools, are of much use. A combination of “shortage gaming” and the “bullwhip effect”, results in unprecedented volatility in demand. B) Supply Bottlenecks: The other challenge that we faced during the pandemic were the painful supply bottlenecks. Trade channels and our vendor operations got closed for a variety of reasons – shortages of labor, sickness, travel bans, or simply because they fell in containment zones. What this meant was that the ecosystem of suppliers, which you could rely on to support your manufacturing process was not
